Hi guys,
Its been great stumbling over this forum filled with plenty of likeminded ppl interested in property. I wished I stumbled over this earlier.
In my first post here on this forum, I am in need of some opinions due to an opportunity that has come up suddenly and just wanted to know what the pros, cons and risk I'm thinking about are what you guys as experienced ppl in the market are thinking similarly.
I have been offered to buy a roughly 8 year old approx 60sqm1bdrm apartment very close to Melbourne CBD in the low $400ks and it is currently being rented out at close to 500pw. I'm yet to inspect this property as I write this but will be so shortly. The apartment is located in a suburb which is part of the commercial heart of melbourne and has plenty of young professionals working there. I'm attracted to this property as the upkeep on the repayments are low (much lower than my 1st investment property I hold elsewhere) and its a property situated in a premium part of Melbourne. The body corp and ancillary fees are standard and not exorbitant
I have a couple of questions:
1) I have researched the suburb and the surrounding apartments and the rent currently seems to be at a premium in comparison to this apartment. Am I missing something here and this particular point really bothers me…. – I have checked that the apartment is not a service apartment and is currently let out under a normal residential tenancy agreement.
2)It being a 1bdrm, would it be easier to let out compared if I were to stump up a bit more and get a 2bdrm similar apartment instead
3) My aim of this property is to let it pay for itself (almost) with as little serviceabilty outlay and maybe get a bit of capital gain in the end. Would this be a correct property for this aim?Thanks for reading and thanks for any opinions in advance. If you need to ask further questions to get a better picture, I will be happy to mention more details.
Hi Mech
Welcome to the forum.
My thoughts on your questions are:
1. The current tenants may be paying too much. If/when they vacate you might not be able to rent it out for the same amount. For that reason, it would be prudent to base your calculations on a lower rent.
2. What is the particular demographic of the area? What do they demand? What are the vacancy rates? Perhaps call a couple of property managers/real estate agents within the area and ask them.
3. No – if you’re looking for something that will pay for itself, then this particular one would need to attract a higher rent. You can play around with this tool to get an idea of how much it will cost you to hold each week – http://www.passgo.com.au/pass-go-investment-property-analysis-tool
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Jamie,
thanks for your comments. Will definitely call a few property managers in the area. I was hoping for this property to be as minimally negatively geared as possible for a couple of years (almost paying for itself) as it is hard to get a positively geared property within capital cities and capital cities are where I'm more comfortable with
With getting info of the property managers..
Is it basically a just pick up the phone and "hi, I'm wondering how much rent this apartment at this address will be able to attract?
Do the property managers tend to be straightforward in answering your questions? Is there a certain approach that one needs to have to get the answer?I'm a rather newbie in this department
Thanks
DennisI'm not sure what advantage you see in keeping the suburb secret when it could well let you get better advice if you specified it.
Oh sorry the apartment is in the suburb of South Melbourne. I've just come upon another conundrum – to lease the apartment furnished or unfurnished. I;ve been making some calls around and been getting mixed msgs regarding furnished apartments.
The gist is that furnished apartments are mainly for short term leases of 3-6 and rarely 12 months. The mixed msgs are that they can be easy/hard to lease out and the extra income from the furnishings may not be enough to cover the increased turnover of tenants.I'm still rather a novice in this as I have never had a turnover of tenants as yet as the 1st IP i own at present still has the original tenant still living in it now which is good. What sort of general fees and their ballpark figures am I looking at when a new lease is needed? Thanks again.
mech81 wrote:Hi Jamie,thanks for your comments. Will definitely call a few property managers in the area. I was hoping for this property to be as minimally negatively geared as possible for a couple of years (almost paying for itself) as it is hard to get a positively geared property within capital cities and capital cities are where I'm more comfortable with
With getting info of the property managers..
Is it basically a just pick up the phone and "hi, I'm wondering how much rent this apartment at this address will be able to attract?
Do the property managers tend to be straightforward in answering your questions? Is there a certain approach that one needs to have to get the answer?I'm a rather newbie in this department
Thanks
DennisHi Dennis
I’d pick a couple that you’d be generally interested in having manage your property (unless you opt for self management) and let them know that you’re on the verge of purchasing a property within a particular area and you’re considering using their services. Generally, they’re happy to spare a few minutes to answer some questions.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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